The first step in the credit repair process is to determine if your credit really is that poor after all
Beginning the process
At Auto Credit Express we have devoted the past two decades to helping consumers with problem credit finance a vehicle and get “on the road” to a better financial future. In the words of Lao Tzu, “This journey of a thousand miles begins with a single step.”
In deference to Lao Tzu, in most cases the way to better credit doesn’t take that long. But if you’ve experienced credit issues in the past, where should you begin?
We’ll take a look at that now.
Do You Really Have Bad Credit?
You may think your credit is poor, but how do you know for sure?
The first step that needs to be taken is to order a copy of your credit report from at least one of the three major credit reporting agencies (called a CRA for short) – Equifax, Experian and TransUnion. Ordering from one, two or even all three CRAs is quite simple. Federal law requires them to furnish consumers with one credit report per year (per bureau) at no charge. This can be done in writing or by going online to AnnualCreditReport.com.
Since all three are probably not exactly alike, it’s a good idea, at least the first time, to order them all at once. That way you can correct any mistakes in all three and know that each of them is accurate.
In a year, you might try spacing them out by ordering one from a different bureau every three months thereby setting up your own credit monitoring service at no cost to you.
If you find any errors, follow the dispute process outlined by each CRA (two of them allow you to do it online). Once you’ve received the results, it’s time for the next step.
In step 2, it’s time to request your credit scores. These you’ll have to pay for, but one should be sufficient for your purposes. Like your credit reports, the credit scores from each CRA will be different because, among other things, even after you’ve checked your credit reports for errors the information on file with each bureau will probably still differ slightly. Besides, when a car dealer orders a copy of your report and your credit score, that score will probably be different as well because most are “weighted” to reflect how you’ve paid on your past auto loans.
Although there are no specific guidelines as to what constitutes a “good” or “bad” credit score, here is a rough estimate, based on FICO’s score range of 300 on the low end and 850 on the high end:
Bad: 560 or less
Very Good: 725-759
Great: 760 and above
It’s also important to realize that lenders look at more than just your credit score in determining if you qualify for a car loan – including such factors as debt to income and loan to value, topics we’ll cover later on. So there you have it.
The Bottom Line
Before applying for any kind of loan, it’s important that you know the information contained in your credit reports is accurate as well as at least one of your credit scores.
One more thing we feel is important: at Auto Credit Express we specialize in matching consumers in challenging car credit situations with dealers that can offer them their best chance for approved auto loans.
So if you’re serious about reestablishing your credit, you can begin the process now by filling out our online car loans application.
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